Specials R Us expects to begin the coming year with 60 units of Product F in finished goods inventory. It expects to sell 585 units of this product during the year and anticipates the ending finished goods inventory for the product will be 80 units. Each item of Product F requires 6kgs of Material AB. The company expects to have 800 kg of Material AB on hand at the beginning of the coming year and wishes to end the year with 1000 kg in inventory. How many kilograms of Material AB must the company purchase during the year?
A) 3 190 kg
B) 3 510 kg
C) 1 480 kg
D) 3 830 kg

Question

Quizplus · Accepted Answer

The company needs to produce 605 units (585 sales + 80 ending inventory - 60 beginning inventory). Each unit requires 6 kg of Material AB, so 3,630 kg is needed (605 units x 6 kg/unit). With 800 kg on hand and wanting 1,000 kg at year-end, they need to purchase 3,830 kg (3,630 kg needed + 1,000 kg desired - 800 kg on hand).

Specials R Us Expects to Begin the Coming Year with 60